- USD/CAD attracts some dip-buying amid a modest pickup in the USD demand.
- A solid bounce in the US bond yields and helped ease the USD bearish pressure.
- Tuesday’s focus will remain on G7 teleconference amid absent economic data.
The USD/CAD pair caught some fresh bids on Tuesday and climbed back above mid-1.3300s, recovering a part of the previous session’s intraday slide.
A modest pickup in the US dollar demand – backed by a strong recovery in the US Treasury bond yields – turned out to be one of the key factors that assisted the pair to attract some dip-buying ahead of the 1.3300 round-figure mark.
USD/CAD supported by reviving USD demand
The US equity markets made a solid come back on Monday amid speculations of potential monetary policy easing by major central banks. This allowed the US bond yields to rebound sharply from all-time lows and underpinned the USD.
Meanwhile, the positive move seemed rather unaffected by a mildly positive tone surrounding crude oil prices, which tend to underpin demand for the commodity-linked currency – the loonie, albeit might turn out to be the only factor capping gains.
Hopes of promised action by global central banks, coupled with growing optimism that OPEC and its allies will order deeper output cuts at their meeting on March 5-6 assisted oil prices to preserve the overnight goodish recovery gains from 14-month lows.
It will now be interesting to see if the pair is able to capitalize on the positive move or runs into some fresh supply at higher levels. Tuesday’s key focus will remain on the G7 teleconference, which should influence the pair amid absent relevant economic data.
Technical levels to watch